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Russia hits at Ukraine with chocolate war

Russia has imposed a ban of chocolate imports from Ukraine’s confectionery company Roshen in what appears to be an attempt to punish its pro-European owner, Petro Poroshenko, a former top government minister and an influential businessman.

Russia's consumer rights watchdog, Rospotrebnadzor banned imports of Ukrainian confectionery giant Roshen's products on 29 July, two days after a visit of Russian President Vladimir Putin to Ukraine, marked by a cooling of relations with his Ukrainian counterpart Viktor Yanukovich.

Putin was visiting Ukraine for the 1,025th anniversary of a mass baptism which marked the consolidation of Kyivan Rus, the medieval state from which the Russian Empire later grew. AFP noted that Putin spent only 15 minutes in his meeting with Yanukovich, and held a surprise meeting with pro-Kremlin Ukraine politician Viktor Medvedchuk.

Medvedchuk, the head of administration under former president Leonid Kuchma, is seen by analysts as Moscow's favoured candidate for presidential elections in 2015.

Russia’s chief sanitary inspector Gennady Onishchenko said that Russia banned the products because they do not meet quality and safety standards.

Ukraine has a strong and competitive confectionery sector. Its four major manufacturers have imported state-of-the-art machinery from Western countries and have been successfully exporting to Russia. According to reports by the specialised press, sales by Roshen surpassed the $1 billion threshold in 2010 and have continued growing since.

As the Moscow Times reported, the Federal Consumer Protection Service inspected Roshen's products from Moscow stores and found that they had "toxic impurities" while milk chocolate produced by the company even held traces of benzopyrene, a carcinogenic chemical, according to an announcement published on the service's website.

Roshen is owned by Petro Poroshenko, a businessman and a former minister of foreign affairs and of trade. Forbes estimates his fortune at $1 billion (€754 million) and he is often cited as one of the most influential people in Ukrainian politics.

Poroshenko held recently talks in Brussels with Štefan Füle, the EU's commissioner for enlargement and neighbourhood policy, the European External Action Service officials and several MEPs. He also met with the Brussels press, expressing support for the need to transform his country according to EU standards.

According to the Russian press, the so-called ‘chocolate war’ with Russia could cost Roshen an estimated $200 million.

In the meantime, Russia asked Belarus and Kazakhstan, as members of its Customs Union, to ban Roshen’s products. Belarus has already announced it will not allow confectionery manufactured by Roshen to cross its territory, while Kazakhstan said tests were conducted on the products and a decision would be taken shortly.

The Moscow Times recalled that Roshen is not the first Ukrainian producer to get banned from Russia. Onishchenko stopped the supply of Ukrainian cheeses to the country in February 2012, though supplies were later resumed. As with previous bans, experts suspect that there are political motives for the decision.

Pavel Rozenko, a member of the Ukrainian parliament, said the move is likely to be Russia's answer to his country's continued refusal to join Russia’s Customs Union. He added that he expects other similar measures to be taken by Russia as Ukraine readies to sign a ‘Deep and comprehensive free trade agreement’ (DCFTA) with the European Union.

Ukraine hopes to sign the DCFTA and the EU-Ukraine association agreement agreement at the 28-29 November Eastern Partnership Summit, to be held in Vilnius under the Lithuanian EU presidency. Several EU leaders, especially from the former Soviet bloc countries, are pushing for a signature of the association agreement in Vilnius, out of geopolitical considerations.

But others, led by Germany, have raised conditions linked to judicial reforms and the release from prison of former Prime Minister Yulia Tymoshenko (see background).

Background

At the EU-Ukraine summit on 25 February, Council President Herman Van Rompuy named the three areas where the EU wants to see progress before signing an association agreement with Kyiv.

The three conditions are to address the problem of "selective justice" - a reference to the imprisonment of former prime minister Yulia Tymoshenko - dealing with the democratic shortcomings stemming from the October national elections, and advancing judiciary reforms.

David O'Sullivan, the chief operating officer of the European External Action Service, recently spelled out the conditions in greater detail: